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Sri Lanka’s economic crisis: Finding peaceful, equitable and sustainable way out

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By Siri Hettige,
Emeritus Professor of Sociology,
University of Colombo

I wish to begin this article with a very broad assertion, namely, Sri Lanka’s present economic crisis is the result of a series of deliberate and short- sighted policy measures taken by post-liberalisation regimes since 1977. These policy measures led to not only structural changes in the economy but also far reaching changes in many other sectors such as education, health, transport and social welfare. As regards the economic changes, the trends have been quite clear. To understand this, one only has to follow the changes in the macroeconomic indicators over the last four decades.

If we first look at the structural changes brought about by liberalisation policies, it was quite clear that the service sector expanded rapidly, often at the expense of industrial and agricultural sectors leading to a widening trade gap as imports of industrial and even agricultural commodities increased steadily, far exceeding the value of exports. But, instead of addressing the emergent structural distortions of the economy, successive governments promoted export of labor and tourism as a way of earning foreign income to pay for rapidly increasing industrial and other goods Imported to the country.

Increasing availability of foreign exchange from worker remittances and tourism not only helped bridge the otherwise widening trade gap but also pay for all sorts of consumer goods demanded buy the increasingly affluent sections of the population. The expansion of this class was facilitated by low tax regimes maintained by successive governments. Increasing disposable incomes of a sizable segment of the population also increased the demand for private services in health, transport and education. And this led to the opening up of these sectors for private investment resulting in the proliferation of private health care providers, international schools in and around Colombo and Importation of hundreds of thousands of private vehicles.

The above developments contributed to unprecedented inequalities in the areas of health, education and passenger transport, all of which hitherto remained mostly publicly provided services. Inequality became clearly evident in all these sectors but post- liberalisation regimes failed to do anything significant to contain increasingly visible inequalities not only in household income but also the widening gap between urban and rural/estate sectors.

The failure of the post-1977 regimes to contain growing income inequality by implementing a progressive taxation policy led to decreasing state revenue, making it impossible to allocate adequate resources to publicly provided health, education and transport services. Poor quality of these services in turn created highly unequal life chances for lower income groups in society. For instance, poor educational facilities in rural and estate areas forced parents to pay for private tuition that emerged as a thriving business in all parts of the country. Poorly funded and crowded public transport services forced even many low-income people to buy transport equipment like imported motor cycles and three-wheelers to have more convenient modes of local transport, not to mention hundreds of thousands of all sorts of motor cars imported for the use of higher income groups. The same sort of development was also evident in the health sector when private provision of health care became an integral part of the health sector in Sri Lanka.

increasing cost of living as a consequence of the above developments encouraged more and more people including young men and women to migrate overseas for extended periods of employment and this helped many families to earn supplementary incomes not only to cover their day to day consumption but also to save money for children’s education, buy land, build houses, etc. But such economic gains came with considerable social costs such as the neglect of small children, break up of families and even the spread of alcohol abuse by men. Yet, increasing remittances soon became the biggest single foreign exchange earner for the country, often over 7 billion USD per year. On the other hand, increasing outflow of labor from rural and estate areas for overseas employment led to increasing costs of agricultural labor making small scale agriculture unviable, often resulting in the abandonment of many small parcels of agricultural land by farmers resulting in a decline in agriculture production and related livelihoods.

Despite social costs of labour migration, increasing worker remittances became a blessing in disguise for successive governments. In fact, populist governments began to label migrant workers as “Rata Viruwo” (“Oversees heroes”). following the equally adulatory term “Rana Viruwo” used for security service personnel fighting in the war in the north and east of the country. Availability of foreign currency earned by migrant workers enabled the governments and private companies to pay for all sorts of imports demanded by consumers, in particular those who purchased all kinds of motor cars and electrical appliances.

In spite of largely consumption driven economic growth, state revenue continued to remain low as a proportion of the GDP. In fact, state revenue declined from about 20% of GDP in the mid 1970’s to about 8% to 10% of GDP in recent years. Implications of this became so obvious when university academics asked the government to allocate 6% of the GDP for education alone. While this was obviously an impossible proposition, public investment in education had declined to about 1.5% of the GDP. In fact, this was a small fraction of what many countries, even in the Asian region invested in public education in recent decades.

The result of a very low level of public investment in education has had serious consequences for the education sector. Well to do families began to move their children from government schools to international schools that proliferated in urban areas alongside well-equipped private schools. Poorer families had no choice but rely on poorly endowed schools for their children’s education. In short, providing equal opportunities to all children and youth became an impossibility within a highly unequal education system. The situation in the health and transport sectors has not been any better than in education.

As it is evident from what is outlined above, the economic and social conditions that emerged following the implementation of neoliberal policies over the last several decades have not been equitable, just or sustainable. In fact, the conditions became worse over the last two decades when the populist regimes that came to power did not seem to care about the emerging vulnerabilities of the Sri Lankan economy due to its serious structural distortions and weaknesses. Moreover, when the public funds raised through commercial borrowings were diverted into infrastructure projects that often did not have any prospect of generating an economic return, public debts became a very serious issue that needed urgent attention. Yet, what followed was even worse when authorities began to rely on commercial borrowings to raise public funds to support government expenditure and this eventually led to high inflation imposing a heavy burden on lower income groups in the country.

The developments outlined above eventually prepared the ground for the unprecedented economic crisis when the foreign debts accumulated over several decades could no longer be serviced, resulting in the declaration of bankruptcy in early 2022.

Based on the above discussion, it can be concluded that the path to the present economic crisis was laid by shortsighted policies adopted by successive governments with callous disregard for the serious adverse effects of such policies on a large majority of people. But, what is equally important to note is that there are no political leaders and others to take responsibility for the obvious policy failures. On the other hand, the country cannot move forward, beyond the present crisis, unless a genuine national effort is made to not only agree on what went wrong but also come up with an alternative policy framework to guide desirable policy shifts and necessary institutional reforms at all levels.



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Rethinking post-disaster urban planning: Lessons from Peradeniya

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University of Peradeniya

A recent discussion by former Environment Minister, Eng. Patali Champika Ranawaka on the Derana 360 programme has reignited an important national conversation on how Sri Lanka plans, builds and rebuilds in the face of recurring disasters.

His observations, delivered with characteristic clarity and logic, went beyond the immediate causes of recent calamities and focused sharply on long-term solutions—particularly the urgent need for smarter land use and vertical housing development.

Ranawaka’s proposal to introduce multistoried housing schemes in the Gannoruwa area, as a way of reducing pressure on environmentally sensitive and disaster-prone zones, resonated strongly with urban planners and environmentalists alike.

It also echoed ideas that have been quietly discussed within academic and conservation circles for years but rarely translated into policy.

One such voice is that of Professor Siril Wijesundara, Research Professor at the National Institute of Fundamental Studies (NIFS) and former Director General of the Royal Botanic Gardens, Peradeniya, who believes that disasters are often “less acts of nature and more outcomes of poor planning.”

Professor Siril Wijesundara

“What we repeatedly see in Sri Lanka is not merely natural disasters, but planning failures,” Professor Wijesundara told The Island.

“Floods, landslides and environmental degradation are intensified because we continue to build horizontally, encroaching on wetlands, forest margins and river reservations, instead of thinking vertically and strategically.”

The former Director General notes that the University of Peradeniya itself offers a compelling case study of both the problem and the solution. The main campus, already densely built and ecologically sensitive, continues to absorb new faculties, hostels and administrative buildings, placing immense pressure on green spaces and drainage systems.

“The Peradeniya campus was designed with landscape harmony in mind,” he said. “But over time, ad-hoc construction has compromised that vision. If development continues in the same manner, the campus will lose not only its aesthetic value but also its ecological resilience.”

Professor Wijesundara supports the idea of reorganising the Rajawatte area—located away from the congested core of the university—as a future development zone. Rather than expanding inward and fragmenting remaining open spaces, he argues that Rajawatte can be planned as a well-designed extension, integrating academic, residential and service infrastructure in a controlled manner.

Crucially, he stresses that such reorganisation must go hand in hand with social responsibility, particularly towards minor staff currently living in the Rajawatte area.

“These workers are the backbone of the university. Any development plan must ensure their dignity and wellbeing,” he said. “Providing them with modern, safe and affordable multistoried housing—especially near the railway line close to the old USO premises—would be both humane and practical.”

According to Professor Wijesundara, housing complexes built near existing transport corridors would reduce daily commuting stress, minimise traffic within the campus, and free up valuable land for planned academic use.

More importantly, vertical housing would significantly reduce the university’s physical footprint.

Drawing parallels with Ranawaka’s Gannoruwa proposal, he emphasised that vertical development is no longer optional for Sri Lanka.

“We are a small island with a growing population and shrinking safe land,” he warned.

“If we continue to spread out instead of building up, disasters will become more frequent and more deadly. Vertical housing, when done properly, is environmentally sound, economically efficient and socially just.”

Peradeniya University flooded

The veteran botanist also highlighted the often-ignored link between disaster vulnerability and the destruction of green buffers.

“Every time we clear a lowland, a wetland or a forest patch for construction, we remove nature’s shock absorbers,” he said.

“The Royal Botanic Gardens has survived floods for over a century precisely because surrounding landscapes once absorbed excess water. Urban planning must learn from such ecological wisdom.”

Professor Wijesundara believes that universities, as centres of knowledge, should lead by example.

“If an institution like Peradeniya cannot demonstrate sustainable planning, how can we expect cities to do so?” he asked. “This is an opportunity to show that development and conservation are not enemies, but partners.”

As climate-induced disasters intensify across the country, voices like his—and proposals such as those articulated by Patali Champika Ranawaka—underscore a simple but urgent truth: Sri Lanka’s future safety depends not only on disaster response, but on how and where we build today.

The challenge now lies with policymakers and planners to move beyond television studio discussions and academic warnings, and translate these ideas into concrete, people-centred action.

By Ifham Nizam ✍️

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Superstition – Major barrier to learning and social advancement

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At the initial stage of my six-year involvement in uplifting society through skill-based initiatives, particularly by promoting handicraft work and teaching students to think creatively and independently, my efforts were partially jeopardized by deep-rooted superstition and resistance to rational learning.

Superstitions exerted a deeply adverse impact by encouraging unquestioned belief, fear, and blind conformity instead of reasoning and evidence-based understanding. In society, superstition often sustains harmful practices, social discrimination, exploitation by self-styled godmen, and resistance to scientific or social reforms, thereby weakening rational decision-making and slowing progress. When such beliefs penetrate the educational environment, students gradually lose the habit of asking “why” and “how,” accepting explanations based on fate, omens, or divine intervention rather than observation and logic.

Initially, learners became hesitant to challenge me despite my wrong interpretation of any law, less capable of evaluating information critically, and more vulnerable to misinformation and pseudoscience. As a result, genuine efforts towards social upliftment were obstructed, and the transformative power of education, which could empower individuals economically and intellectually, was weakened by fear-driven beliefs that stood in direct opposition to progress and rational thought. In many communities, illnesses are still attributed to evil spirits or curses rather than treated as medical conditions. I have witnessed educated people postponing important decisions, marriages, journeys, even hospital admissions, because an astrologer predicted an “inauspicious” time, showing how fear governs rational minds.

While teaching students science and mathematics, I have clearly observed how superstition acts as a hidden barrier to learning, critical thinking, and intellectual confidence. Many students come to the classroom already conditioned to believe that success or failure depends on luck, planetary positions, or divine favour rather than effort, practice, and understanding, which directly contradicts the scientific spirit. I have seen students hesitate to perform experiments or solve numerical problems on certain “inauspicious” days.

In mathematics, some students label themselves as “weak by birth”, which creates fear and anxiety even before attempting a problem, turning a subject of logic into a source of emotional stress. In science classes, explanations based on natural laws sometimes clash with supernatural beliefs, and students struggle to accept evidence because it challenges what they were taught at home or in society. This conflict confuses young minds and prevents them from fully trusting experimentation, data, and proof.

Worse still, superstition nurtures dependency; students wait for miracles instead of practising problem-solving, revision, and conceptual clarity. Over time, this mindset damages curiosity, reduces confidence, and limits innovation, making science and mathematics appear difficult, frightening, or irrelevant. Many science teachers themselves do not sufficiently emphasise the need to question or ignore such irrational beliefs and often remain limited to textbook facts and exam-oriented learning, leaving little space to challenge superstition directly. When teachers avoid discussing superstition, they unintentionally reinforce the idea that scientific reasoning and superstitious beliefs can coexist.

To overcome superstition and effectively impose critical thinking among students, I have inculcated the process to create a classroom culture where questioning was encouraged and fear of being “wrong” was removed. Students were taught how to think, not what to think, by consistently using the scientific method—observation, hypothesis, experimentation, evidence, and conclusion—in both science and mathematics lessons. I have deliberately challenged superstitious beliefs through simple demonstrations and hands-on experiments that allow students to see cause-and-effect relationships for themselves, helping them replace belief with proof.

Many so-called “tantrik shows” that appear supernatural can be clearly explained and exposed through basic scientific principles, making them powerful tools to fight superstition among students. For example, acts where a tantrik places a hand or tongue briefly in fire without injury rely on short contact time, moisture on the skin, or low heat transfer from alcohol-based flames rather than divine power.

“Miracles” like ash or oil repeatedly appearing from hands or idols involve concealment or simple physical and chemical tricks. When these tricks are demonstrated openly in classrooms or science programmes and followed by clear scientific explanations, students quickly realise how easily perception can be deceived and why evidence, experimentation, and critical questioning are far more reliable than blind belief.

Linking concepts to daily life, such as explaining probability to counter ideas of luck, or biology to explain illness instead of supernatural causes, makes rational explanations relatable and convincing.

Another unique example that I faced in my life is presented here. About 10 years ago, when I entered my new house but did not organise traditional rituals that many consider essential for peace and prosperity as my relatives believed that without them prosperity would be blocked.  Later on, I could not utilise the entire space of my newly purchased house for earning money, largely because I chose not to perform certain rituals.

While this decision may have limited my financial gains to some extent, I do not consider it a failure in the true sense. I feel deeply satisfied that my son and daughter have received proper education and are now well settled in their employment, which, to me, is a far greater achievement than any ritual-driven expectation of wealth. My belief has always been that a house should not merely be a source of income or superstition-bound anxiety, but a space with social purpose.

Instead of rituals, I strongly feel that the unused portion of my house should be devoted to running tutorials for poor and underprivileged students, where knowledge, critical thinking, and self-reliance can be nurtured. This conviction gives me inner peace and reinforces my faith that education and service to society are more meaningful measures of success than material profit alone.

Though I have succeeded to some extent, this success has not been complete due to the persistent influence of superstition.

by Dr Debapriya Mukherjee
Former Senior Scientist
Central Pollution Control Board, India ✍️

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Race hate and the need to re-visit the ‘Clash of Civilizations’

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Australian Prime Minister Anthony Albanese: ‘No to race hate’

Australian Prime Minister Anthony Albanese has done very well to speak-up against and outlaw race hate in the immediate aftermath of the recent cold-blooded gunning down of several civilians on Australia’s Bondi Beach. The perpetrators of the violence are believed to be ardent practitioners of religious and race hate and it is commendable that the Australian authorities have lost no time in clearly and unambiguously stating their opposition to the dastardly crimes in question.

The Australian Prime Minister is on record as stating in this connection: ‘ New laws will target those who spread hate, division and radicalization. The Home Affairs Minister will also be given new powers to cancel or refuse visas for those who spread hate and a new taskforce will be set up to ensure the education system prevents, tackles and properly responds to antisemitism.’

It is this promptness and single-mindedness to defeat race hate and other forms of identity-based animosities that are expected of democratic governments in particular world wide. For example, is Sri Lanka’s NPP government willing to follow the Australian example? To put the record straight, no past governments of Sri Lanka initiated concrete measures to stamp out the evil of race hate as well but the present Sri Lankan government which has pledged to end ethnic animosities needs to think and act vastly differently. Democratic and progressive opinion in Sri Lanka is waiting expectantly for the NPP government’ s positive response; ideally based on the Australian precedent to end race hate.

Meanwhile, it is apt to remember that inasmuch as those forces of terrorism that target white communities world wide need to be put down their counterpart forces among extremist whites need to be defeated as well. There could be no double standards on this divisive question of quashing race and religious hate, among democratic governments.

The question is invariably bound up with the matter of expeditiously and swiftly advancing democratic development in divided societies. To the extent to which a body politic is genuinely democratized, to the same degree would identity based animosities be effectively managed and even resolved once and for all. To the extent to which a society is deprived of democratic governance, correctly understood, to the same extent would it experience unmanageable identity-bred violence.

This has been Sri Lanka’s situation and generally it could be stated that it is to the degree to which Sri Lankan citizens are genuinely constitutionally empowered that the issue of race hate in their midst would prove manageable. Accordingly, democratic development is the pressing need.

While the dramatic blood-letting on Bondi Beach ought to have driven home to observers and commentators of world politics that the international community is yet to make any concrete progress in the direction of laying the basis for an end to identity-based extremism, the event should also impress on all concerned quarters that continued failure to address the matters at hand could prove fatal. The fact of the matter is that identity-based extremism is very much alive and well and that it could strike devastatingly at a time and place of its choosing.

It is yet premature for the commentator to agree with US political scientist Samuel P. Huntingdon that a ‘Clash of Civilizations’ is upon the world but events such as the Bondi Beach terror and the continuing abduction of scores of school girls by IS-related outfits, for instance, in Northern Africa are concrete evidence of the continuing pervasive presence of identity-based extremism in the global South.

As a matter of great interest it needs mentioning that the crumbling of the Cold War in the West in the early nineties of the last century and the explosive emergence of identity-based violence world wide around that time essentially impelled Huntingdon to propound the hypothesis that the world was seeing the emergence of a ‘Clash of Civilizations’. Basically, the latter phrase implied that the Cold War was replaced by a West versus militant religious fundamentalism division or polarity world wide. Instead of the USSR and its satellites, the West, led by the US, had to now do battle with religion and race-based militant extremism, particularly ‘Islamic fundamentalist violence’ .

Things, of course, came to a head in this regard when the 9/11 calamity centred in New York occurred. The event seemed to be startling proof that the world was indeed faced with a ‘Clash of Civilizations’ that was not easily resolvable. It was a case of ‘Islamic militant fundamentalism’ facing the great bulwark, so to speak, of ‘ Western Civilization’ epitomized by the US and leaving it almost helpless.

However, it was too early to write off the US’ capability to respond, although it did not do so by the best means. Instead, it replied with military interventions, for example, in Iraq and Afghanistan, which moves have only earned for the religious fundamentalists more and more recruits.

Yet, it is too early to speak in terms of a ‘Clash of Civilizations’. Such a phenomenon could be spoken of if only the entirety of the Islamic world took up arms against the West. Clearly, this is not so because the majority of the adherents of Islam are peaceably inclined and want to coexist harmoniously with the rest of the world.

However, it is not too late for the US to stop religious fundamentalism in its tracks. It, for instance, could implement concrete measures to end the blood-letting in the Middle East. Of the first importance is to end the suffering of the Palestinians by keeping a tight leash on the Israeli Right and by making good its boast of rebuilding the Gaza swiftly.

Besides, the US needs to make it a priority aim to foster democratic development worldwide in collaboration with the rest of the West. Military expenditure and the arms race should be considered of secondary importance and the process of distributing development assistance in the South brought to the forefront of its global development agenda, if there is one.

If the fire-breathing religious demagogue’s influence is to be blunted worldwide, then, it is development, understood to mean equitable growth, that needs to be fostered and consolidated by the democratic world. In other words, the priority ought to be the empowerment of individuals and communities. Nothing short of the latter measures would help in ushering a more peaceful world.

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